Findings: Bitcoin Trading Volume in the Last 24 Hours is 98.3% Lower Than Reported

By Jack Filiba


It is widely understood that a portion of the trading volume reported by cryptocurrency exchanges is inaccurate. In fact, LongHash previously covered a report that claimed that the majority of the industry’s “top exchanges” are faking their volume.

Now, a new report investigated how Bitcoin’s daily volume is being inflated by fake trading activity. At press time, it claims that Bitcoin’s spot trading volume in the last 24 hours is around $151.5 million USD. This figure is significantly less than the 24-hour volume estimated on sites like CoinMarketCap, where Bitcoin’s 24-hour volume is currently listed at over $8.9 billion USD.

“Just ten of the 81 top exchanges are revealed to have actual volume”

The report, which was prepared by Bitwise Asset Management, was recently delivered to the U.S. Securities and Exchange Commission (SEC). One of its key findings regards “suspicious exchanges,” which are reportedly inflating Bitcoin’s trading volume through listing fake or otherwise non-economic trades.

One example given in the report is CoinBene, an exchange listed on CoinMarketCap as having a reported trading volume of over $456 million USD in the last day. According to Bitwise, there are several reasons why this exchange’s volume is suspicious. For instance, findings showed a lack of distribution between buy and sell orders on CoinBene, and a real-world footprint that is much smaller than one would expect when considering a leading exchange.

As part of its analysis, the report considered 81 of the largest cryptocurrency exchanges by reported volume. It excluded exchanges based in Korea, due to capital market restrictions, and those with less than $1 million USD worth of volume per day.

Of the 81 “top” exchanges considered, the report claimed that only ten actually had a measurable average daily trading volume between March 4 and March 8, 2019. According to the report, the exchanges with actual volume were:

  • Binance ($110 million USD)

  • Bitfinex ($38 million USD)

  • Kraken (31 million USD)

  • Bitstamp $31 million USD)

  • Coinbase ($27 million USD)

  • bitFlyer (14 million USD)

  • Gemini (8 million USD)

  • itBit ($6 million USD)

  • Bittrex ($5 million USD)

  • Poloniex ($1.4 million USD)

Bitwise: BTC is more orderly and regulated than widely understood

Despite what may seem like a negative take on the world’s leading cryptocurrency, Bitwise’s report to the SEC aims to present a positive case for Bitcoin. While it claims the majority of the asset’s 24-hour volume is fake, it also postulates that the market is more manageable, and regulated, than most people think.

“Considering its market capitalization, Bitcoin’s actual trade volume is reasonable when compared to analogs like gold,” it stated. “In fact, the counterfactual—imagining that the reported volume ($6B) is entirely real—would be concerning, as it would imply that 8.6% of all bitcoin was changing hands every day.”

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